False Optimism Is Detrimental to An Organization’s Mission

Ari Betof
Ari Betof

The founder of Organizational Sustainability Consulting, LLC, Dr. Ari Betof assists senior nonprofit leaders to achieve their mission and overcome fiscal challenges. One of the areas of focus of his consulting work is the phenomenon of false optimism. While leaders should be positive about their mission, they should not be blinded by it. Dr. Ari Betof recently published an article on the website Medium on the seduction of false optimism.

Positivity is often required of nonprofit trustees. The reason they choose to serve in these organizations is that they sincerely want to be forces for good. However, Dr. Betof observes, such optimism can be detrimental if it blinds trustees from reality.

In good practice, trustees must inform their decisions using hard data and prevailing fiscal realities. They should not allow false optimism to birth misleading data interpretation. For example, small revenue jumps should not be the basis of long-term projections, and historically uncorrelated statistics should not be used as predictive indicators. Likewise, revenue dips should not be shrugged off. Where false optimism leads many to look at the future through rose-colored lenses, effective trustees must confront the hard numbers and base their actions on them.

Ultimately, only fiscally healthy organizations fulfill their missions. When false optimism threatens the sustainability of an organization, no matter how well-intentioned the trustees, it cannot fulfill its mission. Optimism is good but it must be held in context to the realities on the ground.

How Board Hubris Can Lead to Unrealistic Organizational Goals

Ari Betof
Ari Betof

A respected Boston-area consultant, Ari Betof, Ed.D., is experienced in team-building and the development of sustainable organizational leadership in the educational and nonprofit sectors. In his Medium article, “The Seduction of False Optimism,” Dr. Ari Betof lays out the ways in which the power of positive organizational thinking can also lead to fundamental misunderstandings of data and cause budget and resource misallocation.

One aspect of this involves blind faith, while another centers on personal hubris, or a belief that one’s own efforts will create an exception to the rule. Organizations are most vulnerable at times of leadership change. When a new executive director comes into a position, excitement is high and the ED may not yet adequately understand the organization’s dynamics.

Betof describes a scenario where a new ED takes past “slow and steady” fundraising growth as a sign of weakness. The new executive fails to take time to understand the factors behind it, such as an aging donor base. The end result is the setting of overly ambitious goals that puts stress on the organization, diverts resources, and ultimately fails to produce sustainable gains.

Unfortunately, this hubris often comes from executives or board members extrapolating from past experience in the for-profit world, where dynamics are in play that may not translate well to an educational setting. In addition, viewing an organization through quarterly or monthly intervals can lead to oversimplification and lack of a contextual basis for accurate decisions.

Blinded by Resolve – An Obstacle to Organizational Planning

Based in Boston, Ari Betof, Ed.D., is a results-driven consultant who helps nonprofit leaders to align their mission and resources in ways that create dynamic organizations. In a recent Medium article, “The Seduction of False Optimism,” Dr. Ari Betof began by emphasizing the valuable service that optimism provides as a counter to challenging and often painful processes involved in setting institutions on a path toward sustainable growth.

Unfortunately, optimism can also cover a multitude of sins, including the papering over of real problems and being “blinded by resolve.” This occurs when an organization has a compelling purpose that engenders a sense of perseverance, even when the data argues against one’s line of action.

Tiny revenue increases can easily be extrapolated into future trend lines, with weaknesses explained away as “blips” and the wrong metrics used to chart a course. This is amplified by the ease with which the wrong conditions can be placed on spreadsheets and made to indicate a compelling path forward.

An example is a model created that charts an organization back to a balanced budget simply by expanding revenue by 2 percent annually, assuming growth generated from programs within the strategic plan. If this outlook has been codified within the plan, few leaders will take a close look at the feasibility of it, when funding constraints subsequently dictate a cutting of expenses by 2 percent.

The end result is often an unrealistic plan, given current budget dynamics, that rarely get brought up in board meetings until the problem has compounded and the organization goes “over the cliff.”

Trends and Advice for Cultivating Healthy Independent Schools

Dr. Ari Betof is the president and founder of Organizational Sustainability Consulting, a firm that coaches and advises senior leaders and trustees of independent schools, small colleges, and other organizations in the nonprofit sectors. He recently shared his perspective on trends and advice for independent school financial sustainability from the National Association of Independent Schools (NAIS) Annual Conference.

Ari Betof highlighted the development of “rapid prototyping” both by NAIS and individual schools.  He also identified meaningful progress in major initiatives in the sector by organizations like Mastery Transcript Consortium.

A second reflection was the continued hesitancy by school leaders to see the challenges in the broader market as being proportionately relevant to their own schools.  He describes this phenomenon as the “seduction of false optimism” and suggests it poses a risk for nonprofit organizations that do not acknowledge the facts of their reality.

The third reflection was the development of new tools that can aid school leaders, but only if they have the time and understanding to use them.

Dr. Ari Betof also offered perspective about how to leverage meaningful takeaways from an intensive conference experience. He concluded the piece by highlighting the contributions of Pearl Rock Kane, who passed away in March 2019. Pearl was the longtime Director of the Klingenstein Center at Columbia University.

Read Dr. Ari Betof’s full article on Medium.